The line spacing on the Cybook is determined by the currently used font's metrics. The following how-to was made by trial-and-error, as I don't have much knowledge about font metrics.
In the examples I'm going to show, I used the free font Bitstream Vera Sans (Vera.ttf).

First download and install FontForge.
Start FontForge and open the font you want to edit. You should see something that looks like this:

Click on "Element" then "Font Info..." or press Ctrl+Shift+F.
Now select "OS/2" on the left side of the Font Information and then the "Metrics" tab on the right side.

Set all numbers to zero in the metrics fields, but don't uncheck the "Is Offset" boxes.

Now comes the tricky part: Depending on the font you'll need to experiment a little to get the line spacing right.
"HHead Ascent Offset" should be a negative number in most cases around -100 to -200 (the lower the value the smaller the line spacing).
"HHead Descent Offset" should be a positive number in most cases around 100 to 200 (the higher the value the smaller the line spacing).
You can make an educated guess by looking at the character size, Vera Sans for example is very large and needs some line spacing. I think HHead Ascent Offset -100 and HHead Descent Offset 100 look nice:
Most Serif fonts have smaller characters and would probably need something like -200 and 200.

Now click OK and select "File" -> "Generate Fonts...". The font type should be TrueType or OpenType (CFF), both formats will work fine on the Cybook.
Click "Save" and ignore any error messages or uncheck "Validate Before Saving" before saving.

Copy the saved font to the Cybook and check if the line spacing looks right now. If not, try other values for "HHead Ascent Offset" and/or "HHead Descent Offset".
When the line spacing is looking good, remember the values for "HHead Ascent Offset" and "HHead Descent Offset" and repeat the procedure described above with the Italic, Bold and Bold-Italic version of the font.

I have just downloaded the font you have put here and it does give me 3 more lines then Verdana in the same eBook and same font size (24 lines with Verdana against 27 with your font!)
Note: the font size being the 3th in size from the 12 we have available in the Cybook.

One more info - this font shows my country diacritics (ã, ç, á, etc…) without a problem.

I've just switched over to that font and it's clear and readable, and the line spacing is miles better than Verdana. So much so I'm now thinking Verdana is crap and I'm wondering how Bookeen allowed the Cybook to ship without a good font

My camera's batteries are charging right now, so I can't offer screenshots at the moment, but I attached the adapted font. You can compare it to the original font, which I linked to above.

LOVE your tutorial. Just one *SMALL* problem. I can't get Cygwin to properly install on my machine (about as plain-vanilla a Windows XP version as one can get with an HP Pavilion (Pentium D)) so that means I can't get FontForge to install, either.

As I prefer Book Antiqua, Berling Antiqua and Georgia, I guess I'll just have to suffer quietly.

I have to agree. Looks quite a bit better. Also makes it more readable. Plus I like that you've gone from 17 lines to 21 lines. Less pages per book and less page turns equals more battery life.

Yes! I suppose if I could figure out how to make FontCreator do the same thing, I'd have used that, but I found out the hard way that FontCreator has as steep a learning curve as Photoshop - and given that I'm not going to be using it for more than a handful of fonts, it just doesn't make sense to do so. (Except for the niggling little detail that I can't seem to get all the right things to install with Cygwin to make FontForge work on my machine. )

Oh well. Maybe someone can start up a line of freeware fonts optimized for the Cybook and other ereaders.

Like line spacing, this would be better handled by the reader software internally. And adding larger font sizes to the reader is probably easier for Bookeen to do than adding a user-specified line spacing. Even so, I think a double size (say) font would be an interesting demonstration.

Like line spacing, this would be better handled by the reader software internally. And adding larger font sizes to the reader is probably easier for Bookeen to do than adding a user-specified line spacing. Even so, I think a double size (say) font would be an interesting demonstration.

I imagine one could make a TrueType font that starts with 18pt and goes to 36pt or even 48pt. Someone may have to try that - and as I'm not a font guru, my imagination may well be completely out of sync with how TrueType works.

I imagine one could make a TrueType font that starts with 18pt and goes to 36pt or even 48pt.

TrueType fonts can (always?) render whatever size you want. The trick here is for the Cybook to select 24pt but actually get back 48pt. There are lots of reasons why this might not work, but perhaps there is a way to make it happen.